What is ACRE?

At this time of year, most farmers are already thinking about spring planting; however, they should also be considering enrolling in the Average Crop Revenue Election (ACRE) program.

The ACRE Program provides a safety net based on state revenue losses. When the ACRE program is selected, it substitutes the price-based safety net of counter-cyclical payments as part of the Direct and Counter-Cyclical Program.

The United Stated Department of Agriculture (USDA) provides farms with a revenue guarantee. The formula multiples the five-year state average by the most recent two-year national price average for each eligible commodity.

Eligible commodities
  • Wheat, barley and oats
  • Grain sorghum and corn
  • Upland cotton
  • Rice
  • Soybeans
  • Other oilseeds: canola, crambe, flaxseed, mustard seed, rapeseed, safflower, sesame seed and sunflower seed Peanuts
  • Dry peas, lentils and small and large chickpeas

For the 2012 crop year, the two-year price average will be based on the 2010 and 2011 crop years. When all criteria are considered, if the target and annual revenue is less than the revenue guarantee, the farm is eligible for support with the ACRE program, assuming that all other qualifications are met.

Because Ohio had two years of record-high grain prices, the revenue guarantee in the ACRE program is very good.

According to Chris Bruynis, assistant professor and Ohio State University Extension educator, ACRE could be the right safety net option for some farmers in Ohio this season because of the strong protection it will offer.

“Examining the numbers and price/yield assumptions, farmers can speculate about the probability of an ACRE payment being triggered in 2012 and if it’s right for them,” Bruynis said.

Bruynis estimates the price guarantee for 2012 corn to be $5.69 per acre and 2012 soybeans to be $11.50 per acre.

An Ohio’s Country Journal article states that the current strong prices do not indicate much potential for ACRE payments in 2012 if yields are average or above average. The ACRE program does, however, offer strong downside protection for what could be very volatile marketing months ahead.

Farmers have until June 1, 2012 to elect and enroll in the ACRE program. For more information, visit www.fsa.usda.gov.

Are you or do you know a farmer who has participated in the ACRE program? What has been your experience with the program? Do you plan to participate in the program?

Photo obtained from: kneb.com

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